Bitcoin has slowed down on its recent price rally and has moved back to the red zone, showing a brief price correction amid an unexpected shift in market sentiment.
This sudden drawdown in its price movement has triggered a massive rise in the asset’s realized losses, causing it to record the highest spike since late 2022.
The data, which was disclosed by crypto analytics platform Glassnode, has come at a time when panic and fear appear to be gradually returning to the market, sparking discussions across the crypto community.
Bitcoin's short-term holder (STH) sell-offs see dramatic rise
Notably, the on-chain data provided by the source further shows that the significant surge witnessed in the Bitcoin realized losses was accompanied by another massive increase in its short-term holder sell-offs.
As momentum appears to have briefly faded, investors who purchased BTC within the last 155 days have contributed largely to the rise in the realized losses.
The charts showcased by the analyst reveal that recent Bitcoin buyers capitulated aggressively as volatility returned, possibly as a cautionary move to hedge against further losses.
While both increases in the asset’s realized losses and its STH sell-offs have coincided with the sharp decline in the price of Bitcoin from recent highs, the data suggests a dramatic shift in investors’ sentiments.
The move is not entirely a surprise, as historic reactions from short-term holders show that they are increasingly active during market drawdowns.
During such periods, short-term holders often sell their assets at losses when market momentum reverses. This time, the rapid surge in their sell-offs and realized losses has reached the high levels seen during the massive crash witnessed amid the late 2022 FTX collapse.
Bitcoin long-term holders (LTH) stay resilient
Unlike the short-term Bitcoin holders, the data further showed that long-term holders have remained unmoved by the brief price drawdown witnessed recently.
Despite the unexpected market turbulence, long-term holders have seen a very decent increase in their realized losses when compared with STHs.
Apparently, this is all thanks to the higher conviction exercised by seasoned holders and investors like Strategy, who have continued to accumulate and hold their assets through volatility rather than sell into fear.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team